NC Budget and Tax Center, Trump Administration

Report: “Budgets” a top 5 issue for cities, particularly 98% of all towns in North Carolina (and why Trump’s budget could bankrupt them)

President Trump and the NC Senate have already proposed drastic budgets that would hurt millions of low and middle-income households across the country and here in North Carolina. If all politics is local, it is important to listen to what cities and towns have to say.

The 2017 State of the Cities report released this week by the National League of Cities (NLC) finds that economic development, public safety, infrastructure and budgets are the top issues for communities around the nation.

The report points out that ‘budgets’ are particularly a top issue for states in the South, especially in towns and cities that have populations under 100,000. For NC, this is very concerning considering that 98 percent of all cities and towns in the state, spread across 89 mainly rural counties, have populations under 100,000. Moreover, 75 percent of all cities and towns in North Carolina have populations under 5,000. In other words, 543 cities and towns in NC – out of 552 – are highly likely to be concerned about their budget and therefore see it as a top issue.

The report points out that ‘budgets’ has remained one of the top 4 issues for cities each of the past 4 years.

Here’s the full list of the top 10 issues that matter to cities in 2017:

  1. Economic Development: (Job creation, business attraction, downtown development)
  2. Public Safety: (Investing in police and fire departments, increasing transparency)
  3. Infrastructure: (Addressing maintenance issues with roads and aging infrastructure)
  4. Budgets: (A focus on planning for the future amid grand funding concerns)
  5. Housing: (Affordable housing, homelessness, and zoning ordinances)
  6. Education: (Preparing the workforce of the future)
  7. Energy and Environment: (Impact of climate change and the need to be resilient)
  8. Health: (Addressing the opioid crisis and creating a culture of health)
  9. Demographics: (Countering national fervor by embracing diversity)
  10. Data & Tech: (Becoming innovative by integrating technology into city operations)

Trump’s Proposed Budget Could Bankrupt Cities and Towns

As it pertains to budgets, it is worth noting the National League of Cities issued the following statement this week after President Trump released his proposed budget:

“The administration’s budget proposal would be devastating to cities and towns. No community in America would be better off with this budget, and it could bankrupt smaller cities and towns. It does nothing to create jobs in our communities, and violates the president’s core campaign promise to lift up Americans in communities across the nation.

The White House ignored more than 700 city officials who urged the administration to protect crucial programs, including Community Development Block Grants, TIGER grants and the HOME Investment Partnership Program. These vital programs allow communities to invest in public safety, economic development and infrastructure, and create private-sector jobs.

The budget proposal would have a disproportionate impact on America’s small cities and towns, whose budgets are already stretched thin. In these communities, the programs being targeted are a lifeline for maintenance and investment. For those communities, this budget would spell disaster — and, in many cases, bankruptcy.

As the leaders of America’s cities, we call on Congress to throw out this budget proposal and develop a new plan focused on building prosperity, expanding opportunity and investing in our future. Congress must reject this budget proposal or risk derailing local economies nationwide.”

Luis A. Toledo is a Public Policy Analyst for the Budget & Tax Center, a project of the North Carolina Justice Center.
NC Budget and Tax Center, Trump Administration

President Trump’s budget does not add up ($2 trillion math error)

President Trump’s proposed budget was unveiled earlier this week and it includes a $2 trillion math mistake.

According to the proposed budget, “a comprehensive overhaul to our tax code will boost economic growth and investment”, and assumes an aggressive 3 percent growth in the economy. This of course differs significantly from the Congressional Budget Office (CBO) projection of moderate 1.9 percent economic growth over the next ten years reported in its most recent budget and economic outlook. [Note: this large a gap between an administration’s growth forecast and CBO’s is unprecedented (see graph).]

Due to the exaggerated growth assumption, Trump’s budget assumes a $2 trillion increase in revenue through economic growth that will balance the budget. However, the math does not add up as the Trump tax cut is also supposed to pay for the Trump tax cuts. So the $2 trillion is a double-counting error.

In other words, the assumed $2 trillion from higher growth is a double-count as it pays for the Trump tax cuts, and then it pays again for balancing the budget.

Overall, it is clear that Congress must step up and craft a budget that actually adds up and is grounded in serving all of the American people.

Luis A. Toledo is a Public Policy Analyst for the Budget & Tax Center, a project of the North Carolina Justice Center.
NC Budget and Tax Center, Trump Administration

Trump budget goes after vulnerable children and families. Sad!

President Trump vowed to support working families by beefing up crucial supports like the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC). In an unsurprising twist, Trump has reneged on that promise and proposed slashing the EITC and CTC by $40 billion. Instead of supporting working families, he’s proposing raising taxes on the most vulnerable.

The 22 percent of North Carolina households who qualify for these income tax supports are working hard to raise their children and put food on the table. In stark contrast, the President’s budget proposes tax cuts for the country’s wealthiest taxpayers and estates.

Working family tax credits pay off in the short term by alleviating poverty. They also produce long term benefits. Low-income families receiving supports such as the EITC tend to have improved infant and maternal health, better school performance and college enrollment, and increased work and earnings in the next generation.

This budget proposal shifts a huge burden of responsibility onto state governments. Not the least of which will be renewed urgency for state leaders to establish a state Earned Income Tax Credit.  As I wrote about last week, we’ve just fallen behind South Carolina in this regard.

The White House has made it clear that it won’t prioritize working families. Instead, it’s making it harder for them to make ends meet, while the wealthy get another break. North Carolina families need their lawmakers to embrace their responsibility to us all. We need leaders who understand that building a strong economy means making sure all families can thrive, not just rich ones.

Marion Johnson is the Policy Advocate for the Budget & Tax Center, a project of the North Carolina Justice Center.

NC Budget and Tax Center, Trump Administration

Four ways Trump’s budget will harm North Carolina

Smart public investments at the federal level can create jobs, raise wages, increase education, and help unlock economic prosperity for more people and places in our country. Here are four ways the President’s plan would take North Carolina in the opposite direction:

1. Trump’s budget on food assistance: Slashes food assistance by $193 billion over 10 years and shifts the cost of more than $100 billion in SNAP benefits, a longtime federal responsibility, to the states.

Effect on North Carolina: North Carolina is the 8th hungriest place in the US, with 15.9 percent of our people not always knowing where their next meal is coming from. In 2015, SNAP reached 1.6 million North Carolinians, targeting the most vulnerable folks to help ensure that older adults, veterans, and children get enough to eat each day. SNAP benefits help to stimulate the state’s economy too, pumping upward of $2 billion into the economy. On average, from 2011 to 2014, SNAP benefits lifted 175,000 North Carolinians, including 81,000 children, out of poverty.

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News, Trump Administration

Report: Trump education budget slams the working class that helped elect him president

Donald Trump speaking

President Trump’s newly-released K-12 budget would hurt the working class voters who helped elect him president in November, according to a new report from The Atlantic.

The report comes with Trump announcing plans to slash spending on the federal education department by more than $9 billion as the Republican president seeks to bolster the school choice programs touted by Trump and his controversial education chief, Betsy DeVos.

That’s not surprising. Trump has long been outspoken in his desire to increase the federal investment in charters and private schools, although his budget’s call to slash $166 million in U.S. grants for career and technical education programs and halve the size of a federal work-study program are being viewed as something of a surprise, particularly given widespread support for such programs among both Republicans and Democrats.

From The Atlantic:

Trump’s education budget, which was published Tuesday as part of full spending plan’s release, would eliminate more than two dozen programs. The budget “reflects a series of tough choices we have had to make when assessing the best use of taxpayer money,” DeVos said in a statement. “It ensures funding for programs with proven results for students while taking a hard look at programs that sound nice but simply haven’t yielded the desired outcomes.”

The final version reiterates many of the funding priorities outlined in the  “skinny”—i.e., preliminary—budget released in March, which had already made it clear that Trump wanted to get rid of the relatively small education programs that, in the eyes of the administration, lack the evidence and reach needed to prove they’re worthy of investment. The congressional deal struck at the beginning of this month to keep the government running into September, on the other hand, maintains level funding for many of the education programs Trump wants to do away with or trim down.

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